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Yang Eyes Yahoo Buyout With Private Equity

Now, Yang is interested in a deal with private equity firms that would take the $20 billion company off public markets, according to people familiar with the situation.

Such a deal would involve rolling over Yang's stake in Yahoo, which stood at 3.63 percent as of April 2. Yahoo's other co-founder, David Filo, would likely follow Yang's lead and roll over his stake, said other sources close to Yahoo. Filo held 5.90 percent of Yahoo's shares as of May 11.


Yahoo declined to detail Yang's current role other than to say, "The entire Board, including Jerry, is fully aligned and unanimous in support of the comprehensive scope of the ongoing strategic review. As always, Jerry's singular focus remains to serve the best interests of Yahoo — its shareholders, employees, users and advertisers."


Yahoo's advisors are expected to send financial information this week to interested parties, said a person familiar with the matter. Talks so far have been informal and have not firmed up on terms that would compel Yahoo to enter into direct negotiations, said another source.

There are several reasons why Yang might want to take Yahoo private. For starters, Yahoo is punished by Wall Street for not being a growth company and its low stock price prevents shares from being used as currency for acquisitions.

A buyer could sell off Yahoo's international assets, which include a partnership with Softbank in Yahoo Japan as well as about 40 percent stake in Alibaba.

The buyer could then use the cash — estimated to be upward of $12 billion — to pay off debt. That would pare down Yahoo to its U.S. operations, which has deteriorated to the point that they are being valued at just $5 billion and $6 billion, according to two sources close to the situation.
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